States Sue Trump Administration Over Medicaid Work Requirements Rule

A coalition of 26 states has filed a lawsuit against the Trump Administration over an Interim Final Rule issued earlier this month by the U.S. Department of Health and Human Services (HHS) and Centers for Medicare & Medicaid Services (CMS). The Interim Final Rule implements changes to Medicaid under the One Big Beautiful Bill Act (OBBA).

In challenging the Interim Final Rule, that states argue that:

• CMS reinterpreted critical eligibility protections too narrowly: The states contend that Congress included protection in the OBBA, including the definition of “medically frail,” to ensure that individuals with serious illnesses and disabilities do not lose coverage due to Medicaid work requirements. They argue that the Interim Final Rule narrows these protections in ways that could cause eligible individuals to lose access to care, even if they qualify for exemptions.
  
  
• The Interim Final Rule creates significant administrative burdens and confusion: The states argue that the Interim Final Rule increases the likelihood that eligible individuals will lose coverage due to paperwork or reporting issues, rather than any failure to meet work requirements.
  
  
• The Interim Final Rule was issued without adequate consideration of real-world impacts: The states contend that CMS failed to properly evaluate the effects on states, healthcare providers, and Medicaid members, and that the Interim Final Rule contradicts prior federal guidance on which states relied to begin implementation planning.

The coalition is asking the court to block the Interim Final Rule and ultimately strike it down, citing concerns about unlawful changes to federal law interpretation, insufficient procedural justification, and the risk of widespread coverage disruptions for vulnerable individuals.

The lawsuit is co-led by the Attorneys General of California, Massachusetts and New Jersey. They are joined by the attorneys general of Arizona, Colorado, Connecticut, Delaware, District of Columbia, Hawai‘i, Illinois, Maine, Maryland, Michigan, Minnesota, Nevada, New Mexico, New York, North Carolina, Oregon, Rhode Island, Vermont, Virginia, Washington, and Wisconsin, as well as the governors of Kentucky and Pennsylvania.